a. Judith would like to save for retirement. She plans to save $5,000 per year for 20
Question:
a. Judith would like to save for retirement. She plans to save $5,000 per year for 20 years. Her annual retirement contributions will be made at the end of each year. If her retirement account can earn 8.5 percent annual interest, what will the account balance equal twenty years from today, when Judith has made her 20th annual retirement savings contribution.
b. Judith purchased a medical expense insurance policy. The policy has a $3,500 deductible and an 80-20 coinsurance provision. Judith needed a surgical procedure and she was hospitalized for two days after surgery. The total bill (surgery, hospital and other covered expenses) was $28,000. How much of this amount must Judith pay and how much will her insurer pay? Assume all of the expenses are eligible for coverage under the medical expense policy. Clearly indicate how much each party pays. Remember to consider the deductible.
Personal Finance Turning Money into Wealth
ISBN: 978-0134730363
8th edition
Authors: Arthur J. Keown